Bahrain Air grounded by mounting debts

Privately run airline is among most high-profile corporate victims from Bahrain's political crisis. (Reuters)

SummaryPrivately run airline is among most high-profile corporate victims from Bahrain's political crisis.

Debt-burdened carrier Bahrain Air says it will shut down operations and sell its assets after struggling to rebound from the Gulf nation's unrest-driven downturn and to compete with bigger rivals.

The privately run airline is among the most high-profile corporate victims from Bahrain's political crisis that erupted two years ago. The uprising by majority Shiites brought a sharp economic slump, but the kingdom's Sunni rulers claim growth is returning.

All Bahrain Air flights were canceled today after the late night announcement. The five-year-old carrier, a rival to state-owned Gulf Air, also blamed the government for

restricting its activities while demanding debt payment.

The airline operated 112 regional flights a week and had 300 employees.

It also faced completion from heavyweights such as Dubai-based Emirates and Qatar Airways.